Taking your business global is easier than ever with the rise of digital wallets, writes Peter Cowan.
Selling to international markets is a major goal for many Australian online businesses for the obvious reason that cross-border selling can help you reach more consumers therefore increasing your sales and improving profitability.
Although conducting business with global markets sounds appealing, getting there can often seem like a mountain to climb for even the most established of online businesses. Selling into another market can involve comprehensive research, consideration of cultural and language differences, and an understanding of tariffs on your products or trade barriers.
The good news is there are many overseas markets where English is a well-established second language, and chances are there is a ready market for your goods and services. However, regardless of the overseas markets you target, one element will be consistent – they won’t be transacting in Australian Dollars. To enable a seamless checkout experience and maximise conversion, you’ll need to integrate various local payment methods and currencies.
Payment systems and business regulations in other countries can be complex, so out-of-the-box payment solutions that are already engineered to manage multiple payment types and regulatory requirements are a great option. One payment method that can help businesses quickly and easily scale to sell in international markets is the Digital Wallet.
This year, 2.1 billion consumers are expected to use a digital wallet to make a payment or send money, according to Braintree’s 2018 Global Payments Report. This is an increase of almost 30 per cent since 2017, which shows not only the growing adoption of digital wallets but the opportunities they offer to online businesses. This need for fast, easy-to-use, secure and convenient payment options is only expected to grow, driven by trends like:
- An increase in internet connectivity and better mobile infrastructure, especially in Asia
- The rise of digital commerce and online purchases
- More people with bank accounts
- Greater credit and debit card circulation
- A reduction in the use of cash
Australian businesses looking to sell overseas should consider our neighbours in Asia-Pacific. Not only are they geographically the closest market, but they are the most mobile connected in the world. Our research also shows that Asia-Pacific experienced a 33.6 per cent increase in digital purchases being made via a mobile device between 2013 and 2017. Australian merchants looking to expand to Asia-Pacific have the opportunity to benefit from this growth.
Another advantage of using digital wallets is that they provide an extra layer of protection through their tokenisation ability. This is key in a global environment increasingly concerned about customer privacy and financial data. Tokenisation is the process of protecting financial data by replacing the customer’s primary account number (PAN) or card number with a set of randomly generated numbers called a “token” that can only be deciphered by the designated payment gateway. When a customer pays using a digital wallet, the token is exchanged instead of a card number, so their account information is not stored or shared and never touches a business’ server, meaning payments are more secure and processed quicker. This way digital wallets allow merchants selling in a new market to minimise any potential privacy risks and keep their customers safe.
Selling overseas isn’t for every business, but if you’re looking to expand, investigate your options and consider using a digital wallet. Digital wallets consistently rank among the top payment methods buyers choose for international payments – because they’re a secure way to pay. And they’ll give you the ability to provide local funding methods, without the hassle of having to open multiple merchant accounts overseas, letting you get up and running in international markets more quickly.
Peter Cowan, Director & General Manager Mid-Market, Small Business and Partners, PayPal.